The Mumbai NCLT bench directed recipients of payments from Sunshine Housing & Infrastructure to return ₹58.58 crore after finding the transactions gave them unfair preference over secured creditors. The tribunal said the payments occurred during the IBC look-back period. Recipients must repay the amount within 30 days, failing which interest at 12% annually will apply.

NCLT Orders Return Of ₹58.58 Crore To Sunshine Housing Over Preferential Payments To Creditors | AI

The Mumbai bench of the National Company Law Tribunal (NCLT) has directed parties that received payments from real estate company Sunshine Housing & Infrastructure to return ₹58.58 crore to the company, ruling that the payments gave them an unfair preference over secured creditors.

Company Entered Insolvency Process In 2019

Sunshine Housing was admitted to the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) on May 8, 2019, following a petition filed by ICICI Prudential Real Estate AIF-I.

The tribunal found that the payments were made during the statutory look-back period, when transactions involving a company facing insolvency can be examined to determine whether certain creditors or other parties were unfairly favoured.

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Secured Creditors Had Over ₹100 Crore Dues

The NCLT noted that Sunshine Housing had more than ₹100 crore in outstanding dues to secured creditors as of March 31, 2018. ICICI Prudential Real Estate AIF-I was owed ₹40 crore, besides interest, while Axis Finance Ltd was owed ₹66.44 crore, besides interest.

Against these dues, the company’s liquidation value was only about ₹63.29 crore. The tribunal said this meant that the recipients of the disputed payments would otherwise have ranked below the secured lenders when the company’s assets were distributed. The payments therefore resulted in the recipients being paid ahead of secured creditors, it held.

The tribunal also examined a transaction involving mortgaged property. It noted that the security interest and sale agreement were created during the relevant period, after the insolvency application had been filed.

The NCLT has ordered the recipients to restore the ₹58.58 crore to Sunshine Housing within 30 days. If any amount remains unpaid after the deadline, it will attract interest at 12% per annum.

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